Behind Your Business

OUTSIDE Facebook’s vast new headquarters in Silicon Valley is a huge sign with an image of a hand on it giving a thumbs-up sign. A tiny digital version of the same hand sits on millions of websites and invites Facebook’s 900m or so users to click on it to share content they have found with their pals. Now Facebook is hoping to get another big thumbs-up when it stages its eagerly awaited initial public offering (IPO) of 12% of its equity on America’s NASDAQ stockmarket on May 18th. Assuming all goes according to plan, the flotation will be the largest yet undertaken by an internet company.On a roadshow across America to promote the listing this week, Mark Zuckerberg, Facebook’s 27-year-old boss, and other executives were treated like rock stars. Long queues snaked out of hotels where they were holding meetings, as investors lined up to hang on their every word. Hordes of photographers rushed to take pictures of Mr Zuckerberg, in his trademark hoodie, as he and his colleagues were whisked off to waiting limousines.This frenzy is further proof, if any were needed, that Facebook has become a global internet idol....

THE technology industry is at war over intellectual property. On May 7th the first round of a three-part fight between Oracle and Google over patent and copyright claims relating to the Java programming language ended in a decision that denied outright victory to either firm. Apple, Samsung and others are fighting over smartphone patents. Facebook and Yahoo! are at loggerheads over internet patents. Accusations abound that innovation is taking a back seat to litigation. Only the lawyers are smiling.All of which makes this a good time to launch a new approach to trading intellectual property, says Gerard Pannekoek, the boss of IPXI, a new financial exchange that lets companies buy, sell and hedge patent rights, just like any other asset. The idea is to offer a patent or group of patents as “unit licence rights” (ULRs), which can be bought and sold like shares. A ULR grants a one-time right to use a particular technology in a single product: a new type of airbag sensor in a car, say. If a company wants to use the technology in 100,000 cars, it buys 100,000 ULRs at the market price. ULRs are also expected to be traded on secondary markets.This is simpler, faster and cheaper than the lawyer-intensive process of negotiating bilateral licences for intellectual property, the high cost of which discriminates against small companies, leaves patents unused on the shelf and hampers...

NOT again. Just when another tousle-haired Japanese entrepreneur hoped it was safe to make a billion or two, along come the forces of law and order threatening to throw the rule book at him: in this case, the Act Against Unjustified Premiums and Misleading Representations. That, at least, is how some people viewed news this week that the Consumer Affairs Agency was investigating a feature, popular on Japan’s ubiquitous mobile-phone games, called a “complete gacha”, in which players collect sets of randomly generated tokens to swap for in-game rewards. Such games have made fortunes for several internet start-ups.Agency officials, however, have expressed worries that complete gacha may be a form of gambling (it sometimes involves real money), which can cause children and adults to splurge beyond their means. They questioned its legality.The retribution was swift. In three days the value of GREE, whose 35-year-old owner, Yoshikazu Tanaka, has been called the youngest self-made billionaire after Facebook’s Mark Zuckerberg, plunged by a third. DeNA, another social-games site, lost 22%.To Yoshito Hori, a venture capitalist and former GREE backer, the news recalled a pattern of crackdowns on alleged abuses by start-ups in recent years that have discouraged the Japanese from setting up new businesses. He urged the government to seek a...

ONE recent night, the ballroom at Hong Kong’s Grand Hyatt hotel was transformed into an elegant Parisian salon. Several dozen very wealthy families from all over China were flown in for a weekend of cruises, property tours and a gala auction. Chow Tai Fook (CTF), a Hong Kong firm that is the world’s largest jeweller, paid the bill.Adrian Cheng, an executive director at the firm and scion of CTF’s controlling family, put it all together to reward customers who spend over 1m yuan ($158,000) a year. Many come from the provinces in and around Beijing, Mr Cheng whispers: “closer to power and money” than Shanghai or Shenzhen.Even in provincial cities like Kunming, the rich routinely expect luxury shops to pamper them with cocktails and massages, says Francis Phua of DKSH, a consultancy. However, these days China has so many people flashing gold and platinum cards around that the seriously wealthy expect luxury firms to treat them to ever more exotic and exclusive events, to maintain their sense of superiority. CTF has taken its “VVIPs” on junkets to Paris Fashion Week, on helicopter tours and rare-wine tastings.A new report from CLSA, a stockbroker, forecasts that more than half of this year’s growth in luxury goods will come from China, where sales are set to soar by 24% in 2012. The country is already the largest market for jewellery after America, and for gold after India, and...

AMERICAN presidents have had Cadillacs or Lincolns as official limousines since Franklin Roosevelt, who had one of each—his Cadillac was a bulletproof one, confiscated from Al Capone. But despite recent attempts to revive them, the two luxury brands’ best years are distant dots in their rear-view mirrors. In 1990 around 250,000 of each brand were sold. Last year GM sold 152,390 Cadillacs, up almost 4% on 2010, while Ford’s sales of Lincolns slipped a bit to just 85,643.Cadillac got into Webster’s dictionary as a synonym for “the best”, but for years now more American buyers have reckoned that a BMW, Mercedes or Lexus is better. European motorists have spurned GM’s decades-long efforts to interest them in Cadillacs. However, if there is one place that now has lots of rich people who appreciate big, blingy, get-outta-my-way motors, it is China. That is why GM is about to start producing its new Cadillac XTS (pictured), a big sedan to compete with BMW’s 7-Series, in a factory in Shanghai. Later this year Cadillac will launch another new model on the Chinese...